ML20203A950
| ML20203A950 | |
| Person / Time | |
|---|---|
| Issue date: | 02/13/1998 |
| From: | Bell H NRC OFFICE OF THE INSPECTOR GENERAL (OIG) |
| To: | Shirley Ann Jackson, The Chairman NRC COMMISSION (OCM) |
| Shared Package | |
| ML20203A954 | List: |
| References | |
| NUDOCS 9802240166 | |
| Download: ML20203A950 (3) | |
Text
____________-_-___-_ _ _ __ - .
[o ueg%,- UNITED STATES
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$y NUCLEAR REGULATORY COMMISSION
'% :: $ WASHINGTON, D.C. 20555-0001 4 . . . . . ,o OFFICE OF THE February 13,1998 INSPECTOR GENERAL MEMORANDUM TO: Chairman Jackson FROM: Hubert T. Bell / b2, 2U Inspector General
SUBJECT:
RESULTS OF THE AUDIT OF U.S. NUCLEAR REGULATORY COMMISSION'S FISCAL YEAR 1997 FINANCIAL STATEMENTS Attached is the independent auditors' report on the U.S. Nuclear Regulatory Commission's (NRC) Fiscal Year 1997 financial statements. The Chief Financial Officers (CFO) Act requires the Office of the inspector General (OlG) to annually audit NRC's Principal Financial Statements. The report contains (1) the principal statements and the auditors' opinion on those statements, (2) the auditors' opinion on management's assertion about the effectiveness of intemal controls, and (3) a report on NRC's compliance with laws and regulations. Written comments were obtained from the CFO and are included as an appendix to the independent cuditors' report.
Audit Results The independent auditor issued an unqualified cpinion on the Statement of Financial Position, the Statements of Operations and Changes in Net Position, Cash Flows, and Budgetary Resources and Actual Expenses.
In the opinion on management's assertion about the effectiveness of internal controls, the auditor identified two new reportable conditions and closed two prior-year reportable conditions.
The new conditions concern (1) business continuity (recovery) plans for financial systems, and (2) segregation of duties for certain accountir,g functions. The two reportable conditions closed concern (1) software capitalization procedures, and (2) payroll system integration and labor cost distribution.
The report on NRC's compliance with laws and regulations disclosed that the reportable condition relating to business continuity plans is considered a substantial noncompliance with the Federal Financial improvement Act of 1996. Tests of compliance with selected provisions of other laws and regulations disclosed no other instances of noncompliance.
9802240166 980213 PDR ORG NRCIO PDR
1 The CFO's response to the issue relating to business continuity plans stated, "The three systems mentioned in the audit report are all scheduled for replacement within the next one to two years....The OCFO [ Office of the Chief Financial Officer) and the OClO [ Office of the Chief g
Information Officer) will determine the cost effectiveness of developing continuity / contingency plans for the systems that are to be retired or replaced." Because this is a significant issue, we wish to reiterate and clarify our position. -
The Office of Management and Budget Circular A-130 clearly requires agencies to plan for I reasonable continuity of support should normal operations be disrupted. Although NRC plans to replace or retire several financial information systems, the agency should not allow its business operations to continue to be at risk. We fully understand that a strategy for cost containment is essential to any agency decision. However, unless a system replacement or retirement is imminent (e.g. , the current payroll system), all systems must have some type of continuity / contingency recovery mechanism.
We did not review NRC performance data this year because NRC is in a transition period for reporting this data. Further, over the five previous fiscal years, OlG has reviewed the systems and verified data from which performance information was derived. With one exception, OlG ,
found the prior performance data to be accurate. NRC took corrective action on that one exception. In the future, we plan to review performance data reported in NRC's annual performance plan.
We appreciate NRC staffs cooperation and continued interest in improving financial management within NRC.
Attachment:
As stated l
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cc: Commissioner Dieus f Commissioner McGaffigan L. Commissioner Diaz L. Callan, EDO J. Blaha, AO/OEDO
[- P. Norry, DEDM/OEDO H. Thompson, DEDR/OEDO A. Thadani, Acting DEDO /OEDO
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A. Galante, CIO J. Funches, CFO J. Cordes, Acting OCAA
[-. D. Rathbun, OCA K. Cyr,' OGC -
C. Stoiber, OIP
(: W. Beecher, OPA J. Hoyle, SECY E. Halman, ADM
[ T. Martin, AEOD A. Levin, Acting IRM G. Caputo, O!
[. P. Bird, HR I. Little, SBCR R. Bangart, OSP
[ C. Paperiello, NMSS S. Collins, NRR M. Knapp, A.cting RES T. Taylor, ACMUI
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{- H. Miller, RI L. Reyes, Ril A. Beach, Rlil
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